On May 12, 2020, House Democrats introduced the HEROES Act which intends to “protect workers and uplift families during the COVID-19 crisis.”
Key measures include income and benefits security, more stimulus checks, support for the unemployed, child and family care for essential workers, and emergency assistance for individuals and families.
The Act would cost $3 trillion dollars and surpass the CARES Act as the largest stimulus bill in United States history.
Bigger, better stimulus payments
According to the bill press release, the Heroes Act features a “[a] more substantial, second round of economic impact payments to provide relief to Americans who are struggling.”
Specifically each family member would receive a $1,200 payment, up to $6,000 per household.
The bill also seeks to fix shortcomings with the initial round of payments. Changes include the following:
Dependents – Makes all dependents eligible for the $500 qualifying child amount in the Economic Impact Payments made under the CARES Act, previously only applicable to children below age 17.
This allows households with dependents who are full-time students below age 24 and adult dependents to also receive the $500 amount. This provision is effective retroactive to the date of enactment of the CARES Act.
ITIN taxpayers – Allows Economic Impact Payments to be made to individuals with ITINs, which were excluded from the previous round of stimulus payments. This provision is effective retroactive to the date of enactment of the CARES Act.
The HEROES Act also exempts Economic Impact Payments from reduction or offset with respect to past-due child support.
The credit phases out starting at $75,000 of modified adjusted gross income ($112,500 for head of household filers and $150,000 for joint filers) at a rate of $5 per $100 of income.
Earned income tax credit
The Act expands the eligibility and the amount of the earned income tax credit for taxpayers with no qualifying children for 2020.
The maximum credit amount in 2020 increases from $538 to $1,487.
The Act allows taxpayers in 2020, for purposes of computing the EITC, to substitute their 2019 earned income for their 2020 earned income if their 2020 earned income is less than their 2019 earned income.
Child tax credit
The Act makes the child tax credit (“CTC”) fully refundable for 2020 and increases the amount to $3,000 per child ($3,600 for a child under age 6).
Tenant-Based Rental Assistance – $3 billion to allow public housing agencies (PHAs) to respond to coronavirus and the ability to keep over 2.2 million families stably housed even when facing a loss of income. $1 billion for new, temporary, vouchers for individuals and families who are homeless or at risk of becoming homeless, or fleeing domestic violence.
Public Housing Operating Fund – $2 billion for PHAs to carry out coronavirus response for the operation and management of almost 1 million public housing units.
Community Development Block Grant – $5 billion for coronavirus response and to mitigate the impacts in our communities to be distributed by formula to current grantees.
Homeless Assistance Grants – $11.5 billion for Emergency Solutions Grants to address the impact of coronavirus among individuals and families who are homeless or at risk of homelessness.
Emergency Rental Assistance– $100 billion to provide emergency assistance to help low-income renters at risk of homelessness avoid eviction.
Housing for the Elderly – $500 million to maintain operations at properties providing affordable housing for low-income seniors.
Continued Assistance to Unemployed Workers
The Act would extend the $600 per week federal pandemic unemployment compensation supplement to state and federal unemployment benefits through January 31, 2021.
The House will meet on Friday to vote on the bill. The full text of the bill can be found on the House website.